On August 1, Gold Company exchanged a machine for a similar machine owned by Cowboy Company and also received $7,000 cash from Cowboy Company. Gold's machine had an original cost of $80,000, accumulated depreciation to date of $14,500, and a fair market value of $60,000. Cowboy’s machine had an original cost of $95,000 and a book value of $45,000 and a fair value of $53,000. Required: a. Prepare the necessary journal entry by Gold Company to record this transaction. b. Prepare the necessary journal entry by Cowboy Company to record this transaction.
On August 1, Gold Company exchanged a machine for a similar machine owned by Cowboy Company and also received $7,000 cash from Cowboy Company. Gold's machine had an original cost of $80,000, accumulated depreciation to date of $14,500, and a fair market value of $60,000. Cowboy’s machine had an original cost of $95,000 and a book value of $45,000 and a fair value of $53,000. Required: a. Prepare the necessary journal entry by Gold Company to record this transaction. b. Prepare the necessary journal entry by Cowboy Company to record this transaction.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On August 1, Gold Company exchanged a machine for a similar machine owned by Cowboy Company and also received $7,000 cash from Cowboy Company. Gold's machine had an original cost of $80,000,
Required:
a.
Prepare the necessary
b.
Prepare the necessary journal entry by Cowboy Company to record this transaction.
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